Like a slimming club member celebrating reaching their goals, newly streamlined Prudential has marked its first set of numbers since offloading both its UK and US businesses by beating expectations.
While the UK arm is firmly in the rear-view mirror after a 2019 spin off, the US division remained a drag on performance in 2021 until the demerger completed in the autumn.
“There is now real clarity to the strategy as the company is purely focused on Asia and, to a lesser extent, Africa. These insurance and investment markets are much less mature and should allow Prudential to grow more rapidly than rivals focused on the West as it sells financial products to these underserved populations,” said AJ Bell’s Russ Mould.
“Further evidence for the company’s pivot to Asia is evident in the fact the replacement for retiring CEO Mike Wells will be based permanently in the region.
“For the time being Prudential has signalled it has no intention of shifting its primary listing from the London market. However, this might change under Wells’ successor given the natural gravity of the business will be in the East.
“By raising funds in Hong Kong in the latter part of last year, Prudential managed to add Asian investors to the shareholder register and bolster its balance sheet to grow in its two core territories through acquisitions.
“This creates an enticing looking set of circumstances for whoever comes in to replace Wells but, before they get carried away, there are a few clouds on the horizon too. These include the unpredictable outcomes from the war in Ukraine and the closure of the border between mainland China and its current base of operations, Hong Kong.
“Their hope must be that it falls to interim CEO Mark Fitzpatrick to sort out these issues before he steps down from a job which he’s been clear he doesn’t want on a permanent basis.”